Full Judgment Text
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.3506 OF 2010
Sopan (dead) through His L.R. .…Appellant(s)
Versus
Syed Nabi ….Respondent(s)
J U D G M E N T
A.S. Bopanna,J.
1. The appellant herein was the defendant in Regular Civil Suit
No.237 of 1980 filed before the Civil Judge, Junior Division at
Ahmedpur. The suit in question was filed seeking a judgment and
decree for redemption of mortgage and recovery of the possession of
the suit scheduled land. The land in question is situated in Survey
No.2/A measuring 6 acres 2 guntas. The Civil Court by its judgment
Signature Not Verified
Digitally signed by
ASHWANI KUMAR
Date: 2019.10.05
11:13:55 IST
Reason:
th
dated 20 September, 1984 accepted the contention of the plaintiff
and decreed the suit whereby the redemption of the suit land was
2
ordered treating the transaction to be a mortgage. The appellant
herein, namely the defendant in the said suit claiming to be
aggrieved by the said judgment was before the lower appellate court
i.e. the Additional District Judge at Latur in Regular Civil Appeal
No.233 of 1984. The Lower Appellate Court on reappreciation of the
evidence on record and consideration of the legal position has
th
through its judgment dated 29 June, 1990 allowed the appeal and
set aside the judgment and decree of the Civil Court. Accordingly,
the suit filed by the respondent herein was dismissed. The
plaintiff/respondent herein therefore filed the Second Appeal before
the High Court of Judicature at Bombay, bearing S.A.No.479 of
1991. The High Court on answering the substantial question of law
in favour of the respondent herein had allowed the appeal and
consequently decreed the suit. The appellant herein who was the
defendant in the suit is, therefore, before this Court in the present
appeal.
2. For the purpose of convenience and clarity the parties will be
referred to in the same rank as assigned to them in the Civil Suit
namely, the appellant herein would be referred to as the defendant,
while the respondent herein would be referred to as the plaintiff.
3. The brief facts are that the plaintiff and the defendant were
3
known to each other and due to such acquaintance, the plaintiff had
taken money from the defendant as and when such financial
assistance was required. At a stage when the plaintiff received a
sum of Rs.5,000/, the same was construed as the consideration for
the land owned by the plaintiff bearing Survey No.2/A measuring 6
acres 2 guntas and the defendant already being put in possession of
th
the said property, a registered sale deed dated 10 December, 1968
was executed in favour of the defendant. A separate agreement
th
dated 10 December, 1968 was also entered into between the parties
whereby the plaintiff had agreed to repay the said amount and
secure reconveyance of the property. Another agreement was
th
entered into on 29 August, 1969 between the parties under which
the respondentplaintiff agreed that he has taken Rs.5,000/ from
the appellantdefendant and the possession of the land was given.
In addition, respondentplaintiff has received a sum of Rs.2,224/
without any interest, in all Rs.7,224/. The respondentplaintiff
agreed if the amount is not repaid on “Velamavasya” the deed will
be considered as sale deed. It is in that background the plaintiff
claiming that he is prepared to repay the amount so as to secure
back the property and, in that regard, construing the transaction as
th
a mortgage, got issued a demand notice dated 10 September, 1980
4
through his Advocate. The defendant got replied the said notice on
rd
23 September, 1980 and disputed the claim put forth by the
plaintiff. The plaintiff, therefore, filed the suit as stated above. The
defendant entered appearance and filed the written statement
disputing the claim. The trial court though had framed several
issues, the entire consideration rested on the construction of the
th
sale deed dated 10 December, 1968 and the contemporaneous
documents, so as to consider whether the same amounts to a
mortgage by conditional sale in the nature of contention put forth, or
as to whether it is a sale transaction.
4. In the present appeal, it would not be necessary for us to
reappreciate the evidence inasmuch as, only the nature of the
transaction will have to be taken note from the three documents,
namely, Exhibits 23, 24 and 14/1 around which the entire
controversy revolves. Before adverting to the said documents, it
would be also necessary to take note of the provision as contained in
Section 58 (c) of the Transfer of Property Act which reads as
hereunder:
58(c) Mortgage by conditional sale. Where the mortgagor
ostensibly sells the mortgaged property:
on condition that on default of payment of the mortgage
money on a certain date the sale shall become absolute
5
on condition not on such payment being made the sale
shall become void, or on condition that on such payment
being made the buyer shall transfer the property to the
seller,
the transaction is called a mortgage by conditional sale
and the mortgagee a mortgagee by conditional sale:
[Provided that no such transaction shall be deemed to be
a mortgage, unless the condition is embodied in the
document which effects or purports to effect the sale].
(emphasis supplied)
5. From a perusal of the proviso to Section 58(c) as emphasised,
it indicates that no transaction shall be deemed to be a mortgage
unless the condition is embodied in the document which effects or
purports to effect the sale. Therefore, any recital relating to
mortgage or the transaction being in the nature of a conditional sale
should be an intrinsic part of the very sale deed which will be the
subject matter. In that background, a perusal of the document at
th
Exhibit 23, namely, the sale deed dated 10 December, 1968 would
make it clear that the document does not disclose that the
transaction is one of mortgage or that of a conditional sale.
However, the issue as to whether it should be construed as mortgage
th
has presently arisen since the agreement dated 10 December, 1968
at Exhibit 24 being a contemporaneous document is relied upon by
the plaintiff to claim that the same indicates that the transaction is
6
a mortgage and the relationship of debtor and the creditor is
established by the said document. In addition, the document which
th
is also to be noticed is at Exhibit 14/1 dated 29 August, 1969. It is
no doubt true that in the document at Exhibit 24 it depicts that the
sale deed is reconveyable when the plaintiff would repay Rs.5,000/
to the defendant and the land would be retransferred. It also
indicates that the interest of Rs.720/ is agreed to be paid every year
on the day of “Gudi Padwa”.
6. The contention on behalf of the defendant is that in addition
to the sum of Rs.5,000/ which was taken by the plaintiff earlier and
was treated as the sale consideration, a further sum of Rs.2,224/
was taken by the plaintiff and accordingly a total amount of
Rs.7,224/ was agreed to be repaid without interest on the
th
“Velamavasya” and the said understanding was reached on 29
August, 1969. The case, therefore, set up by the defendant was that
th
notwithstanding the agreement dated 10 December, 1968 (Exh.24)
th
and the document dated 29 August, 1969 (Exh.14/1) whereunder
reconveyance was agreed, since the amount was not repaid within
one year, though the defendant had agreed to reconvey the property,
the sale deed had become absolute since the plaintiff had failed to
repay the amount and secure the reconveyance.
7
7. However, the learned counsel for the plaintiff has contended
that when the documents at Exhibits 24 and 14/1 is admitted by
the defendant and since it refers to the relationship of debtor and
th
creditor the sale deed dated 10 December, 1968 (Exh.23) is to be
construed as a mortgage by conditional sale. The learned counsel
has referred to the decision of this Court in the case of
P.L.
Bapuswami vs. N. Pattay Gounder (1966) 2 SCR 918 to contend
that it should be construed as mortgage and in that context would
also refer to the decision in the case of
Pandit Chunchun Jha vs.
Sheikh Ebadat Ali (1955) 1 SCR 174 to contend that the
subsequent document would rebut the presumption. In so far as
the legal position relating to the manner in which the document is to
be construed, we notice that this Court in the case of
Dharmaji
Shankar Shinde & Ors. vs. Rajaram Sripad Joshi (D) Lrs. and
(2019) 6 SCALE 682 had considered the entire conspectus of
Ors.
the provision contained in Section 58(c) with reference even to the
decisions relied upon by the learned counsel for the plaintiff and had
arrived at the conclusion that a sale with a mere condition of
retransfer is not a mortgage. It is further held therein that keeping
in view the proviso to Section 58(c) if the sale and agreement to
8
repurchase are embodied in separate documents then the
transactions cannot be a mortgage by conditional sale irrespective of
whether the documents are the contemporaneously executed. It is
further held therein that even in the case of a single document the
real character of the transaction is to be ascertained from the
provisions of the deed viewed in the light of the surrounding
circumstances and intention of the parties.
8. Keeping in view the enunciation of the legal position, we notice
that in the instant case admittedly the claim of the plaintiff is based
on the reliance placed on a contemporaneous document at Exh.24.
Hence at the outset, it is evident that the case of the plaintiff cannot
overcome the rigour of law to term it as a mortgage by conditional
sale. That apart even if the nature of the transaction is taken note
th
of and in that context if the sale dated 10 December, 1968 (Exh.23)
is carefully perused, it not only does not indicate any clause to
demonstrate it as a mortgage but, on the other hand, refers to the
sale consideration, the manner in which it was received and the
plaintiff as the vendor by executing the document has assured the
defendant that he should enjoy possession of the said land
ancestrally which, in other words, is an absolute conveyance. In
th
that background, even if the agreement dated 10 December, 1968
9
(Exh.24) is taken note, the same cannot alter recitals in the sale
deed to treat the same as a mortgage by conditional sale. At best
the said agreement (Exh.24) can only be treated as an agreement
whereby the defendant had agreed to reconvey the property subject
to the repayment being made as provided thereunder. It is in that
th
circumstance, the document dated 29 August, 1969 (Exh.14/1) is
to be viewed. From a combined reading of Exhibits 24 and 14/1 it
would disclose that not only the plaintiff has not repaid the sum of
Rs.5,000/ with interest but had received a further sum of
Rs.2,224/, thus in all taking the financial assistance treated as
sale consideration to Rs.7,224/. Hence, if the reconveyance as
agreed under Exh.24 was to be effected the said amount was to be
repaid on “Velamavasya” failing which the right of reconveyance
would be forfeited and the sale deed would become absolute after
which even the right of reconveyance will not be available.
Admittedly amount of Rs.2,224/ was not repaid by the plaintiff. In
that background, in any event, the document cannot be considered
as a mortgage by conditional sale.
9. In the above background, if the entire transaction is taken
note, since the amount was not repaid the defendant had acquired
absolute right to the property. Hence, he had also initiated
10
mutation proceedings to secure the revenue entries relating to the
land in his favour. Though the plaintiff had opposed the
proceedings the very contention urged herein had been taken note
rd
therein and the Tehsildar by the order dated 23 July, 1974
(Exh.21) has ordered the revenue entries to be changed to the name
of the defendant. Change of mutation in the name of the defendant
is a formidable circumstance to show that the Exh.23 is a sale deed
conveying absolute right and title to the defendant.
10. Though the learned counsel for the plaintiff has relied upon
the decision in the case of Bhimabai Mahadeo Kambekar vs.
, (2019) 3 SCC 191 to contend that
Arthur Import and Export Co.
the mutation of land in the revenue records does not create or
extinguish the title for such land, nor has it any presumptive value
on the title, the said decision would not be of relevance in the
present context as the mutation proceeding becomes relevant in the
instant proceedings though not for the purpose of title. We say so
only to indicate that in the present facts, while construing the
nature of the transaction and while considering as to whether the
plaintiff had a right of redemption as a mortgagor, the fact that the
th
defendant had acted upon the sale deed dated 10 December, 1968
on the same becoming absolute in view of the reconveyance not
11
th
being affected pursuant to the agreement dated 10 December, 1968
and in that circumstance, the right was exercised to secure the
mutation order pertaining to the land is to be treated as a relevant
circumstance. Further, though such mutation order was passed on
rd
23 July, 1974 in a proceeding in the presence of the plaintiff the
said order was not assailed before an appropriate forum and it is
only in the year 1980 the suit in question came to be filed.
11. In the above circumstance the suit seeking redemption of
mortgage was not sustainable. If at all the agreement of
reconveyance (Exh.24) was to be pressed into service, the
appropriate course ought to have been for the plaintiff to institute a
suit seeking for the relief of specific performance. In such suit the
consideration would be on the touchstone of the principles required
to be satisfied as governed under the provisions of the Specific Relief
Act. To that effect there should be appropriate pleading and
evidence in support of the contentions which is not presently
satisfied as the suit is instituted on a misconception.
12. In that background, if the consideration as made by the courts
below is taken note, we are of the opinion that the Civil Court and
the High Court were not justified in their conclusion. On the other
12
hand, the lower appellate court in Regular Civil Appeal No.233 of
1984 has taken into consideration the factual aspects in its correct
perspective and keeping in view the legal position had allowed the
appeal and dismissed the suit. Hence, we hereby set aside the
th
judgment dated 26 September, 2007 passed by the High Court in
th
S.A.No.479 of 1991 and restore the judgment dated 29 June, 1990
passed by the Additional District Judge in Regular Civil Appeal
No.233 of 1984.
13. Accordingly, the above appeal is allowed. Consequently, the
Regular Civil Suit No.237 of 1980 filed by the plaintiff i.e. the
respondent herein shall stand dismissed. However, we pass no
order as to costs.
……………………….J.
(R. BANUMATHI)
……………………….J.
(A.S. BOPANNA)
New Delhi,
July 16, 2019